There is never a dull moment in the digital world, and 2026 promises to be no exception.  We can expect continued advancements within the fields of AI, quantum computing and fintech, but what does this mean for the wider regulatory landscape?  In this article we outline our predictions and trends we expect to continue in technology and AI this year.

Published: 3 February 2026
Author: Joe Stephenson

A global shift in AI regulation?

It appears inevitable that AI will continue to develop at an unprecedented pace throughout 2026, but what remains to be seen is whether governments will take a step back from AI‑specific regulation in favour of leading the race for AI sovereignty and innovation.

In the UK, a private member’s bill seeking to regulate AI (which would require significant parliamentary support to progress) is currently on hold, with DSIT sticking firm to a position of regulator-led oversight, meaning that AI-specific legislation is not currently being considered in the UK.  Similar deregulation themes have emerged from the EU, with the announcement of the wide-ranging Digital Omnibus in late 2025, a proposed package of measures aimed at simplifying the digital acquis, which includes measures relating to the EU AI Act.  In the USA, the Trump administration has in turn issued an Executive Order aimed at limiting state level regulation of AI – though only after states including California, Utah, Texas and Colorado had moved to pass their own laws on AI.

Will this apparent retreat exacerbate an already fragmented digital regulatory landscape?   Or will legislative efforts shift toward the most egregious use cases, as reflected in the UK Government’s current push to ban specific types of ‘deepfake’ imagery?

The race for quantum supremacy

Advanced compute capacity is recognised by most nations as a strategic asset crucial to support both the next generation of technology and their future economic prospects – indicating that a race towards quantum supremacy is on.  Developing compute at the scale required to meet demand is already presenting challenges to both governments and businesses alike.

To secure continued confidence and investment, we can expect to see government partnering with private sector stakeholders to support the resilient infrastructure, streamlined planning processes, and economically viable energy and water consumption.  In line with the UK’s 2025 Compute Roadmap, continued focus on AI Growth Zones and regional hubs – areas in the UK where investment in R&D, compute, and data centre construction can happen at speed – is also expected.

Perusing to purchasing: Agentic AI comes to the fore

The rise of agentic AI is poised to reshape both the retail and payments sectors in 2026, marking a shift from AI systems operating largely at the behest of user prompts, to those which are highly autonomous, capable of acting on behalf of consumers and retailers alike.  If they operate as their developers claim, these agents will be capable of comparing products, negotiating prices, optimising delivery options, and even completing transactions end‑to‑end with minimal human involvement.  Whilst reducing friction in commerce, this expansion in the scope of machine‑driven decision‑making will raise novel legal and ethical complexities.

When an autonomous agent makes a purchasing choice or executes a financial instruction, complex questions arise around liability, informed consent, and the handling of personal data.  Legislators, including the EU with its stalled AI Liability Directive, have so far struggled to codify clear liability principles to address these questions into a coherent statutory framework. Whether governments chose to adapt existing frameworks such as those relating to consumer protection, online safety, and privacy, or enact new legislation to address these issues will remain an open and increasingly important question as industry adoption of AI technology accelerates in 2026.

Ambient retailing: An alternative to agentic AI

Sensors, computer vision and Internet of Things (IoT) devices will continue to transform the consumer retail experience into 2026 and beyond.

Technologies are being trialled and adopted within retail to create ‘smart shelves’ - tech-enabled stock facilities which monitor product levels in real-time and trigger restocking orders or alerts to staff depending on programmed requirements.  In addition to this, we are likely to see a rise in ‘just walk out’ consumer experiences.  Such experience is enabled by an AI-powered ‘smart cart’, which is programmed to recognise products as they are placed in a trolley and automatically charge a consumer’s digital wallet as they exit the store.

Again, whilst transformational to the traditional shopping experience, adopters of the technology should be alert to integration complexity and reliance on numerous different vendors.  Those implementing this technology will need robust contracting models to ensure compliance with data, consumer, and anti-discrimination laws, and to manage operational and financial risk.

AI demand reshapes Tech M&A priorities and funding landscape

Tech M&A will shift towards mid-market deals, with buyers favouring stable, scalable companies and showing caution in deal value. Expectations of interest rate cuts and regulatory easing could spur more transactions, though financing uncertainty remains.

Demand for AI-native firms and infrastructure software is surging, driving significant investment in AI-related assets and R&D. Companies are refocusing portfolios on growth areas like AI and cloud, leading to divestitures and new opportunities. Strategic buyers will prioritise operational fit, while private equity will target high-growth segments to build scale.

Elsewhere, AI is rewriting the rules of European venture capital. Last year, €23.5 billion was invested – up more than 30% on 2024 and now driving around a third of all deal value. That surge has kept overall dealmaking afloat. Strip out AI, and the market would have shrunk.

But there’s a catch. Analysts warn that this level of concentration creates structural risk. If valuations reset and capital stays locked into a narrow band, Europe’s wider ecosystem could feel the squeeze with funding stress, fewer options, and a sharp dip in risk appetite.

Strategic shifts ahead for payments and digital assets

The upcoming regulatory changes in the UK and EU will significantly reshape the financial services and payments landscape, introducing new compliance obligations and operational challenges.

The Financial Services and Markets Act 2000 (Cryptoassets) Order 2025 will extend the regulatory perimeter to include stablecoins and other cryptoassets as specified investments, meaning activities such as issuance, custody, and exchange will require FCA authorisation and adherence to robust AML/KYC, governance, and consumer protection standards. This move is designed to mitigate systemic risks and enhance market integrity in the rapidly evolving digital asset sector.

Concurrently, the FSMA Amendment Order 2025 (SI 2025/859) will bring certain Buy-Now-Pay-Later (BNPL) agreements within the scope of regulated credit agreements from 15 July 2026, imposing requirements for creditworthiness assessments, transparent disclosures, and complaints handling, which will materially impact BNPL providers’ business models and merchant partnerships.

Finally, the Payment Service Directive 3 (PSD3) and revised Payment Services Regulations, expected in late 2026, will introduce sweeping changes to the payments ecosystem, including strengthened consumer protection measures, mandatory API standards for open banking, enhanced fraud prevention, and the removal of exemptions for technical service providers—requiring these entities to seek full authorisation and comply with operational resilience and incident reporting obligations. Collectively, these reforms aim to increase transparency, consumer safeguards, and systemic stability, while driving significant compliance investment, technology upgrades, and strategic realignment across digital finance, credit, and payment service providers.